ASX-listed global insurer QBE will take a US$600 million (AU$766 million) hit to its annual earnings following the impact of Hurricanes Harvey, Irma and Maria and the earthquakes in Mexico.

In an update to the market Tuesday morning the $13.9 billion insurer said with 2017 shaping up to be the worst loss year on record for global insurers it had been forced to increase the amount of money it sets aside for natural disasters. For 2017 its allowance for large individual risk and catastrophe claims has been increased to $1.75 billion.

This includes allowances for large individual risk and catastrophe claims in the fourth quarter, an increase of $600 million.

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"While it is too early to speculate how much reinsurance and primary insurance pricing will rise as a result of recent catastrophe experience, QBE is well placed to benefit from price rises with much of our reinsurance programs already purchased for 2018," he said in a statement.

At the same time the insurer has downgraded its guidance for its unadjusted combined operating ratio (COR) which has now moved up to 100 per cent - 102 per cent. At its half-year resultsin August, QBE forecast a COR of 94.5-96%

A COR over 100 indicates an underwriting business is unprofitable.

Costliest year ever

This year will likely prove to be the costliest year in the history of the global insurance industry. Insurers and reinsurers in 2017 faced a large spike in claims following a slew of devastating natural disasters, ranging from Cyclone Debbie earlier in the year to Hurricane Maria in September

Fitch Ratings said the probability of ratings downgrades for global insurers and reinsurers was mounting as the industry faced more than $100 billion in 2017 catastrophe losses.

Cyclone Debbie in Australia earlier this year, Hurricanes Harvey, Irma and Maria which impacted the Gulf of Mexico, the Caribbean and Florida as well as the earthquakes in Mexico have all impacted QBE's businesses.

Unlike its competitors IAG and Suncorp, QBE has major operations in North America, leaving it open to losses. According to the Florida Citizens Property Insurance Corporation, QBE's insured value exposure to commercial residential property in Florida is $17 billion, around 10 per cent market share of this class.

In September Citi analysts said that the cost of Irma and Harvey combined could mean a "capacity crunch" across the sector that will drive up rates.

"This could mean that growth is back on the agenda for QBE, perhaps suggesting some upside risk to our topline forecasts," said Citi analyst Nigel Pittaway.

"They reinstated their cover and have group risk and catastrophe cover which really caps the exposure, with the risks transferred to their reinsurance entity Equator Re," said S&P global ratings director of insurance ratings Craig Bennett.

Insurers take out reinsurance policies so that a portion of their risk portfolios are held by other parties which reduces the likelihood of them having to pay out large sums from an insurance claim.

Mr Pittaway said in September that "QBE did not disclose how much of its aggregate deductible it had eroded at June 30, 2017, and it remains uncertain. However, it would seem unlikely this event tips it over the $2.05 billion aggregate limit."